A recent report from Santander found that almost a third of UK domestic businesses are considering international expansion in the next three years. Similarly, 56% of businesses in the US, 39% in Spain and 38% in Poland are also considering expanding across borders in pursuit of growth.
If you’re a start-up founder reading this, then you’re probably familiar with some of the motivations to take your company global. Perhaps they’re even front of mind for you as you look forward to 2025.
- The ability to access a better & wider talent pool
- The potential cost savings in lower cost of living markets
- The opportunity for new revenue streams in new markets
- The chance to increase your company’s global brand
It’s often easy to imagine that global expansion is very complicated. But new growth models & expansion strategies are emerging that mean the reverse is true.
In fact, global expansion has arguably never been easier. With access to the right set of tools and with the willingness to adopt a new mindset, building a global workforce can actually be THE competitive advantage that sets your business up for long-term success.
Global expansion is now simplifying to such an extent that there’s almost a bigger cost in NOT doing it.
What if you lacked the speed & creativity necessary to take a new tech product to market because you’re looking within your own borders for the best engineering talent?
What if you’re a US-based startup losing out on top sales people because you didn’t think to look at the employment market in Eastern Europe? What is the cost of not going global?
In a world where your startup likely has ten competitors snapping at its heels, you (quite literally) can’t afford to lose out in a race for global talent.
Having worked with startups and scaleups in over 160 countries, we’re familiar with some of the barriers that founders, CEOs and leadership teams face when they first make the decision to hire globally.
Laws and regulations surrounding tax, payroll, employment benefits and worker classification are complex - and changing all the time. Investing in a new foreign subsidiary costs valuable time and money that many startups simply don’t have.
But, as we’ll explore in this guide, these barriers are now remarkably easy to overcome.
2025 will likely be another year in which the Employer of Record (EOR) market continues to grow, with the overall Employer of Record market expected to reach $6,795 billion by 2028. And there’s a good reason why this particular method of global expansion is becoming more attractive to startup CEOs.
Using an Employer of Record gives companies the opportunity to hire top global talent easily, quickly and cost-effectively.
So in this guide, we’re not just going to explain how to take your startup global, but why you need to think about global expansion differently. Instead of envisioning global expansion as an obstacle to overcome, we want you to think of it as THE opportunity your company needs to seize.
Many startups and scaleups will be looking for ways to expand that offer them agility, flexibility and value for money.
Budgets are tight and every penny of revenue counts.
But the co-founders of US-based consultancy Global Class, Klaus Wehage and Aaron McDaniel, argue that startup companies need an extra ingredient to their expansion strategy: what they call a "global mindset." When businesses are in the early stages of their growth, you’ll often hear CEOs and businesses talk about an entrepreneurial mindset.
But Klaus and Aaron argue that successful expansion means adopting a global mindset, which gives your business the capability to navigate complex bureaucracies and learn more about different cultural nuances. Here’s how Klaus & Aaron explained it to us
“If you imagine a pyramid, in the bottom, we have the entrepreneurial mindset, people who are iterative, resilient, growth-focused. In the middle of the pyramid, you have what we call company mindset, people who can navigate bureaucracy, building coalition and buy-in. But the tip of the pyramid is that cultural mindset, cultural curiosity, cultural mindedness, and really being interested in learning about other cultures to understand how you need to adapt in a given market, but also inside a company culture as well.”
Remember this is a pyramid. It’s important you don’t lose the agility that having an entrepreneurial mindset gives you - but you also need to adopt a mindset that begins to think about building a global company and culture as well. Adopting a truly global mindset means
- Thinking about which model of global expansion will give your business ability to expand quickly AND cost-effectively.
- Sourcing the global talent that will allow you to plan for long-term success and not just short-term revenue.
- Creating the global HR infrastructure that makes it easy to manage a global team while remaining aligned with local employment laws.
- Designing a unified global team that ensures a good employee experience and increases the likelihood of long-term retention.
In this guide we’ll show you how to:
- Adopt the right expansion strategy to help you grow quickly, efficiently and cost-effectively.
- How to effectively source the global talent you need in 2025.
- Understand how to build a truly global team, while staying compliant with local labour laws and ensuring a great employee experience.
Part 1: Choosing the right method of expansion
Choosing the right expansion model is a critical decision that directly impacts your startup's market accessibility and overall success in new geographies.
Each mode of expansion comes with its own set of advantages, challenges, and implications for your ability to navigate local complexities and scale effectively.
For instance, engaging contractors can provide a quick and flexible way to enter a new market, but it also comes with risks around misclassification and intellectual property protection that could limit your long-term growth potential.
On the other hand, setting up a foreign subsidiary gives you the most control over your local operations but also involves significant upfront investment and regulatory compliance burdens.
There are four primary pathways to consider: engaging contractors, partnering with local firms, using an Employer of Record (EOR), or establishing foreign subsidiaries.
Contractors
Hiring contractors can provide a flexible, cost-effective way to tap into global talent pools without the commitment of permanent employment.
This model offers speed, agility, and potential cost savings, making it attractive for early-stage startups or short-term projects.
However, misclassification of contractors is a serious compliance risk that can result in legal penalties, back taxes, and reputational damage.
Partnerships and reselling
Forming strategic partnerships or reseller agreements with established players in your target markets can accelerate your international expansion by leveraging their local knowledge, networks, and customer base.
This model allows you to piggyback on a partner's brand equity and infrastructure, reducing your upfront investment and risk exposure.
However, partnerships also mean shared control and revenue.
Carefully vet potential partners for alignment on vision, values, and objectives. Clearly define roles, responsibilities, and performance metrics in contracts. Protect your intellectual property and maintain visibility into sales and marketing activities.
Establishing foreign subsidiaries
For startups with a long-term commitment to key markets, establishing wholly owned subsidiaries provides the greatest control and stability.
As the legal employer, you can hire directly, protect your IP, and build your local brand presence. However, setting up foreign entities is a complex, costly, and time-consuming process that requires navigating local legal and regulatory requirements. You'll be fully responsible for compliance with labour laws, tax codes, and reporting obligations.
This model is best suited for more mature startups with validated product-market fit and steady revenue streams.
Using an Employer of Record (EOR)
An EOR is a third-party organisation that serves as the legal employer of your international workforce, handling payroll, taxes, benefits, and compliance on your behalf.
This model offers a middle ground between contractors and subsidiaries, allowing you to quickly hire local talent without setting up a legal entity.
EORs are well-suited for startups looking to test a market before committing to a long-term presence, or those lacking the resources to navigate complex local employment regulations.
However, EORs also insert an intermediary between you and your team, which can create challenges around communication, culture, and intellectual property.
That’s why it’s so vital to choose the right Employer of Record partner when you’re scaling.
Let’s think about the example of a US startup expanding into Europe.
A US company that’s considering using an EOR for the first time may not be aware that:
- Different markets in Europe have different attitudes and laws towards EOR.
- Different EOR solutions have different attitudes
towards compliance.
What’s more, it’s natural to assume that, when you’re using an EOR to expand internationally, the EOR is taking on all of the risk. Whichever expansion model you use to expand, it’s going to have a knock-on effect on how you build your global workforce. First and foremost, it’s going to affect how & where you decide to source global content.
Part 2: Sourcing the global talent you need (without breaking the bank)
It’s tempting to initiate your global hiring strategy focussed solely on the costs of employment. Again, keeping employment costs low is a natural consideration for most startups looking to expand.
But there are risks to only prioritising speed and cost. For example, it’s tempting to only hire contractors when you’re first looking to grow a global workforce.
In many markets, top talent strongly prefers full-time employment with benefits over contractor status. By limiting yourself to contractors, you might miss out on the best available talent.
- While contractor relationships might seem cheaper initially, misclassification risks and constant turnover can lead to higher costs in the long run.
- Contractors often feel less connected to your company culture and mission, making it harder to build strong, collaborative global teams.
Now let’s imagine you take a slightly more long-term view.
Build a data-driven hiring strategy.
Successful international expansion requires a data-driven approach to hiring.
Understanding local market conditions ensures informed decisions about where and how to recruit talent.Now imagine trying to hire in a market like this, without having done your research and due diligence.
James Bricknell, a recruitment expert for Bradford Jacobs, highlighted the iGaming industry in Malta as an example of how an oversaturated job market can lead to unsustainable salary inflation and high turnover.
Conversely, consider the costs of expanding your recruitment beyond constrained markets to cut hiring costs and improve retention in a less competitive market. For startups, a resilient talent strategy requires continuous data analysis.
A data-driven hiring strategy should map talent markets, track skill development trends, and monitor migration patterns to anticipate workforce shifts. The long-term benefits for your scaling business are clear: understanding local competition and market dynamics allows for more effective hiring and retention strategies.It’s not just considering where to hire - your talent strategy also needs to take into account long-term employment costs, infrastructure and cultural considerations. Let’s take a closer look.
Cost-performance optimisation
True employment costs extend beyond base salaries to include employer contributions, which can reach 50% in some regions. U.S. tech firms have successfully accessed international talent pools to maintain high standards while optimising costs.
Cultural and linguistic fluency
Proficiency in a language does not guarantee cultural fluency. Roles involving content or customer interaction require native speakers who understand local idioms, humour, and social norms to ensure effective communication and engagement.
Build more sustainable talent strategies
Look for ways you can balance small scale entry into a new talent market with the need to find fully employed, highly engaged professionals who can help you validate your new market and help you grow organically.
Rethink your key talent markets
Different markets offer unique combinations of talent and opportunity.
While regions like India and the Philippines provide access to specialised tech talent, others might offer strategic proximity to target customers or key business partners.
It’s also worth thinking about the tradeoffs of hiring in similar countries with fewer language barriers.
Maintain flexibility
In only thinking of short term growth, you may end up investing a lot of time and resources into one or two overseas markets. But the true value of global expansion comes from flexibility and scalability. Leading companies seek ways to quickly capture opportunities while maintaining the ability to pivot or scale based on market response.
Here’s where we return to the question of your preferred mode of global expansion again. One of the reasons why using an Employer of Record is becoming so attractive for scaling startups is their ability to provide businesses with this much-needed agility and scalability as they attempt to expand on a tight budget.
Part 3: Ensuring your global team feels like one team
Too often, scaling companies treat global benefits and employee experience as a simple checkbox exercise. For example, you could decide to offer the same US-style benefits package everywhere, or only decide to meet the minimum contributions required for a pensions auto-enrolment scheme
This superficial approach misses the deeper cultural and regional differences that truly determine employee satisfaction and retention in new markets.
Then there’s just making your global team feel like one team.
If you’ve decided to take the plunge and look to Eastern Europe instead of San Francisco for your senior engineering talent, you want to create the same close, collaborative and productive relationship as the one you enjoy with your domestic employees.
As Klaus and Aaron's pyramid model suggests, cultural intelligence sits at the apex of global business capability. When it comes to employee experience, this knowledge proves crucial in several ways:
Building an HR tech stack that grows with your business
The metaphor often used to describe an HRIS is that it serves like your company’s central nervous system: the hub from which you manage everything - employee data, payroll, benefits administration, recruitment, compliance, and performance tracking.
But scaling a global company brings with it extra layers of complexity. And if your HRIS isn’t rising to the challenge, you’ve got a problem.
Companies often waste months trying to force their existing systems and processes to work in new markets, only to discover that local requirements demand a completely different approach.
But if you’re making that first tentative step into new markets, it’s more likely that you’re going to encounter those knotty, unexpected HR issues. Here’s some examples.
- You could be trying to hire short-term contractors in a market where contractor classification are more stringent - and you may be caught unawares.
- A key benefit that’s “nice to have” in one market could become a “must have” in another - e.g auto-enrolment of employees into a pension scheme.
That’s why it’s important to design an HR tech stack that will provide:
- Standardised employment contracts that meet local legal requirements
- Automated compliance tracking to monitor changing labour laws
- Centralised document storage for easy audits and reporting
Designing a truly global benefits strategy
Done right, a global benefits strategy helps you stand out from the crowd with potential employees.
When you offer more than the industry standard, you position yourself as an employer of choice, which gives you a competitive edge in a crowded labour market. Back in 2015, a survey from Glassdoor found that 60% of people report that benefits and perks are a major factor in considering whether to accept a job offer. The survey also found that 80% of employees would choose additional benefits over a pay raise.
Designing a truly global benefits offering can be complex, but the long-term rewards for your business are numerous. It’s vital to have a deep cultural knowledge of how benefits are valued and perceived in different markets.
For instance, while US companies might emphasise comprehensive health insurance, employees in countries with strong public healthcare systems might place higher value on other benefits.
Companies that succeed internationally often leverage local expertise to design market-appropriate packages rather than trying to replicate their domestic approach.It’s crucial to recognise that benefits preferences vary significantly across regions, and it’s essential to turn this knowledge into targeted offerings that resonate locally:
"You have to understand that people take holidays in a different way in Europe than they do in the US. There are issues around working hours and availability. France now has the right to switch off. You have to have an 11 hour break away from your device or your computer and not be contactable."
David Bates (Partner at Taylor Wessing)
The successful startups will be the ones that embrace these differences. For example, they might decide to offer.
- Enhanced parental leave programs in European markets where this is highly valued
- Flexible work arrangements that align with local customs, like Spain's summer hours
- Digital disconnection policies in countries like France where work-life boundaries are paramount
But understanding employee expectations goes beyond meeting statutory minimums. The best global strategies also take time to think about unwritten cultural norms.
For example, while Brazilian law mandates 120 days of maternity leave, companies that only offer the minimum might struggle to retain talent in a market where leading employers offer more generous packages.
Similarly, understanding that Swedish companies typically exceed statutory parental leave benefits can be crucial for talent attraction.
Once again, adopting a long-term global mindset can give you that key competitive advantage. This long-term, unified employee experience goes beyond benefits. Simplified global onboarding It’s vital to create onboarding experiences that make new international team members feel valued and integrated from day one. This means:
- Providing locally compliant employment contracts and documentation in appropriate language
- Ensuring new team members have immediate access to necessary systems and tools
- Establishing clear communication channels that work across time zones.
Employees get 24/7 support Remember in the last section we discussed the importance of building a global HRIS system? This is crucial for ensuring that your employees get the information they need, when and how they need it. Your global HRIS processes should be designed to provide.
- Communication tools that support asynchronous collaboration.
- Self-service portals that allow employees to find answers to common questions.
- Payroll systems that adapt to local requirements while maintaining global reporting.
- Access to in-country legal & benefits experts to deal with specialist employment queries.
"As an example, we hired a product designer in Calgary. I don't know if we would have necessarily hired that person in Canada before Omnipresent," Michael Nucci, Director of Operations MaestroQA
How global expansion is simplifying in 2025
Global expansion is no longer optional for ambitious startups. It’s essential.
And when you’re managing lean teams and even leaner budgets, your startup needs a way to scale internationally without unnecessary risk, cost, or complexity.
There’s a reason why the Employer of Record model of expansion is growing in popularity.
Enabling rapid and low-risk market entry
Setting up a legal entity in a new country takes time and capital—resources startups can’t afford to waste. The traditional route can take months, delaying critical hires and market entry.
An EOR eliminates this hurdle, allowing startups to onboard talent in days, not months. By leveraging an EOR’s legal infrastructure, startups can skip lengthy incorporation processes and focus on building their teams.
For industries where speed is everything—like tech and e-commerce—this agility provides a critical competitive edge.
Securing long-term global talent at minimal cost
Successful expansion requires both strategic oversight and adaptability. The EOR model provides this balance by:
- Allowing startups to manage teams directly while outsourcing HR complexities.
- Enabling a "test-and-learn" approach, hiring in new markets without long-term commitments.
- Offering the ability to scale up or down quickly based on market performance.
- Providing an easy transition from contractor to full-time employee as confidence in a market grows.
Building an HRIS that scales with you
Navigating labour laws, tax regulations, and compliance requirements in multiple countries is complex and time-consuming.
Mistakes can lead to costly penalties and reputational damage.Rather than trying to rely on an all-in-one HR solution, the best EORs integrate with your existing HRIS, adapting to your business needs.
Let’s take a second to imagine what this more integrated approach could look like for some of the key personnel at your company. Your in-house recruiter can source the talent you need, where and when you need it with an EOR that’s fully integrated into your applicant tracking system (ATS). Want to hire in the UAE? You can ensure you’re growing your team in full compliance with UAE employment laws.
An EOR that integrates with your HRIS can give your HR manager the ability to track employee onboarding and easily log time off, all without leaving your existing HR system. Let’s not forget our friends over on finance and payroll.
Real-time visibility into payroll reports and the ability to view more granular invoices means fewer payroll queries and a finance team that has a fuller picture of HR spend.
Supporting a cohesive global culture
Hiring internationally isn’t just about filling roles—it’s about creating a unified, high-performing team. A strong global culture ensures consistency and engagement across regions.
Employer of Record solutions are crucial here, since they:
- Provide locally competitive benefits and a standardised employment experience.
- Offer cultural insights and guidance on local hiring practices.
- Strengthen employer branding with seamless, compliant international hiring.
When employees feel valued and supported, they perform better—helping startups attract and retain top global talent.
.avif)
